If you believe the “Fed” has saved the day, think again. I still think we haven’t seen the end of the rough road and these days stock market rebound is more psychological than anything else. With these thoughts on mind, I was reading this morning something on taxation that really made me thinking hard. America (and also Europe, Japan…) is a society in which we “buy stuff” and where the share of real consumption in relation to our GDP is about 70%. Now, when we look at taxation, our governments tax us on what we earn (through our work, and also through our savings, an unfair form of double-taxation) which means that we’re taxed on what we contribute to the economy. Taxing savings, by the way, seems meant to discourage that practice; for other reasons as well, savings in America are now in negative territory while consumption has kept on going up, precisely at the expense of savings. Based on that, we might be much better off in changing our tax system into a consumption tax, which would make us pay based on what we take out of the economy instead on being taxed on what we earn which in effect is our contribution to the economy and our surrounding community. How would you feel about that?
Friday, September 19, 2008
A better way to tax
If you believe the “Fed” has saved the day, think again. I still think we haven’t seen the end of the rough road and these days stock market rebound is more psychological than anything else. With these thoughts on mind, I was reading this morning something on taxation that really made me thinking hard. America (and also Europe, Japan…) is a society in which we “buy stuff” and where the share of real consumption in relation to our GDP is about 70%. Now, when we look at taxation, our governments tax us on what we earn (through our work, and also through our savings, an unfair form of double-taxation) which means that we’re taxed on what we contribute to the economy. Taxing savings, by the way, seems meant to discourage that practice; for other reasons as well, savings in America are now in negative territory while consumption has kept on going up, precisely at the expense of savings. Based on that, we might be much better off in changing our tax system into a consumption tax, which would make us pay based on what we take out of the economy instead on being taxed on what we earn which in effect is our contribution to the economy and our surrounding community. How would you feel about that?
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2 comments:
HI, yes it might be an interesting idea to tax on comsption, the more you buy the more you pay. Hope you have a great day. Stop by to say hello if you get the chance.
Bluemundy
How are we taxed on our savings?
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